In the short run, when a firm produces zero output, total cost equals
A. Marginal costs.
B. Zero.
C. Variable costs.
D. Fixed costs.
Answer: D
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When Sam's Scarves uses 2 knitting machines and employs 3 people, total revenue is $330 a day. When Sam's Scarves uses 2 knitting machines and employs 4 people, total revenue is $360 a day
The value of marginal product of the third worker is ________. A) $110 B) $30 C) $360 D) $90
Despite evidence that companies will find it more profitable to use a commission system of compensation rather than a salary system, many companies continue to pay their workers salaries
Which of the following is one reason why firms choose a salary system? A) Firms that have salary systems do not have to use compensating differentials to attract employees to do hazardous jobs. B) Many workers dislike risk and prefer to be paid a salary rather than to be paid by commission. C) Firms often use salary systems to overcome their principal-agent problems. D) Most business owners and managers are not trained economists; therefore, they are unaware of the research that shows a commission system is more profitable than a salary system.
For a perfectly competitive firm, marginal revenue product is equal to:
a. price minus marginal cost. b. price times marginal revenue. c. price times marginal product. d. none of these.
Which of the following will cause an inward shift in the demand for steaks at a restaurant?
a. A report by the American Medical Association states that the consumption of steak reduces the risk of cardiovascular disease b. A 50 percent reduction in the price of steaks c. A double-digit increase in the price of chicken d. A recession leading to a significant fall in the income levels of consumers e. The expectation that the price of steaks will double within two months